BP PLC (NYSE: BP), one of the largest oil, gas, and energy companies in the world, has committed to becoming emission-free by the year 2050. In addition, CEO Bernard Looney, who has been in his new job for less than two weeks, has committed to reducing the carbon intensity of the products that BP sells.
The latest announcement has surprised both consumers and the investment world. It shows that BP is focused on a greener future, despite being primarily a fossil-fuel company. BP’s move to become emission-free will also bring it into compliance with the 2016 Paris Agreement.
How Will BP Achieve Its Ambitious Targets?
Becoming emission-free will not be a simple task for BP, despite having 30 years to make good on its pledge.
The company will start immediately on measures to reduce carbon intensity and emissions. In the next three years, BP will deploy methane measuring devices at its largest hydrocarbon processing sites. The company believes that this will allow it to reduce methane emissions by up to 50%.
In addition to this, BP will also increase its investments in business segments related to clean energy. While hydrocarbons are powering the world today, analysts predict that the majority of global energy needs will be generated by renewables in the next 50 years. BP clearly agrees with this prediction. It is already expanding its low-carbon business activities. It has recently increased investment in solar energy, with a joint venture known as Lightsource BP, of which it owns a 50% stake. BP also created BP Bunge Bioenergia, a Brazilian company that focuses on developing biofuels and biopower.
It was also announced that BP will end its spending on corporate reputation marketing, and will divert funds towards promoting its emissions-free policies.
BP’s Decision Puts it Ahead of American Competitors
BP is the latest major European oil company to announce a carbon-reduction and emission-free strategy. It follows Equinor (NYSE: EQNR), Royal Dutch Shell (NYSE: RDS.A), and Repsol (OTC: REPYY).
Notably, American oil producers like Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) have not committed to any major initiatives or roadmaps, but have pledged only to cut greenhouse gases.
This will make a difference in the investment markets. Investors have a lot of confidence in renewable and clean energy, and they are likely to reward the companies that have the most robust long term strategies.
In BP’s case, it remains a strong investment, particularly for portfolios that leverage the long term potential in green energy initiatives.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…